When the updated Stewardship Code landed this month, it made waves across the investment ecosystem. Praised by some, challenged by others. It’s a litmus test for how seriously market participants take their role in building a fairer, greener future.
One thing is now clear: the direction of travel is non-negotiable. Stewardship is no longer a box-ticking exercise. It’s a strategic lever and those not adapting risk falling behind.
“The new Code sets out clear expectations for effective stewardship, helping firms act with clarity. This is vital not only for building trust in UK markets but also for supporting long-term growth and competitiveness of the UK economy.” – Sacha Sadan, FCA Director of Sustainable Finance
The New Stewardship Code: A Wake-Up Call
The FRC’s latest overhaul of the UK Stewardship Code places sharper emphasis on real-world outcomes, ESG integration, and systemic risk mitigation. It’s a decisive shift from disclosure to delivery.
“The new Code provides signatories with a flexible principles-based framework that provides greater transparency on their stewardship in the face of unprecedented uncertainty. The updated Code focuses on long-term sustainable value creation while cutting unnecessary reporting and improving engagement quality.”
Richard Moriarty, FRC CEO
For asset owners, particularly pension funds and sovereign wealth entities, the implications are profound. They are now being asked to demonstrate how they are driving change, not just disclose that they tried.
“The new Code provides a clear focus on stewardship delivering long term sustainable value for clients whilst meeting any specific objectives and has been broadly supported by the investment industry.
A streamlined Code and reporting process has the potential to be more effective, while continuing to drive up standards and deliver an effective market for stewardship.” Andrew Ninian, Director, Stewardship, Risk and Tax at the Investment Association
Market Reactions to the Code: Between Resistance and Realignment
It’s unsurprising perhaps that reactions have been mixed. While some asset managers argue that the Code’s new expectations are operationally onerous, many see it as a necessary evolution.
Forward-thinking players have embraced it. They recognise the opportunity to align capital flows with societal imperatives like net zero and inequality reduction.
Key movements in the market include:
- Increased demand for engagement data: Asset owners are now asking managers to evidence impact. This has prompted a surge in stewardship tech adoption.
- Pressure on passive strategies: Index-heavy portfolios are being scrutinised for how effectively they engage on ESG issues.
A pivot towards collaboration: Industry-wide platforms and pooled engagement efforts are gaining traction. This to help meet the Code’s call for systemic influence.
Embracing the Future: Tech as an Enabler for the Stewardship Code
A 2025 study by Northern Trust reveals 79% of asset owners are enhancing their technology adoption. There’s a focus on bolstering data accuracy, compliance, and risk management.
Technology is no longer a nice-to-have, it’s the stewardship differentiator. Solutions like the Maanch Engagement Tracker are helping investors not only meet regulatory expectations but leapfrog them.
By centralising engagement data, surfacing actionable insights, and automating reporting, platforms empower owners to leverage their stewardship narratives. Maanch clients have saved an average of 1,000 hours preparing stewardship reports. This while enhancing transparency and issue escalation across ESG themes, from SBTi compliance to living wage advocacy. 70% reduction in time leads to substantial cost benefits, with average savings of £250,000. For more impacts, have a look at our report, here.
Conclusion: Stewardship Is a Strategy
As scrutiny intensifies, stewardship is emerging as a core investment capability, not a compliance afterthought. The revised Code is an invitation to lead. And with the right tools, asset owners can move beyond paperwork into partnership. They can help drive the twin goals of net zero transition and social equity with precision and purpose.
The market may have started with a mixed reaction. But as the dust settles, one thing is certain: the future belongs to those who steward it.
Let’s chat:
To discuss shifting reporting requirements and support you need to leverage real value from reporting and stewardship, get in touch.
Current signatories to the Stewardship Code scheduled to report in autumn are expected to do so by 31 October 2025.
